Financial Inclusion for Self Help Groups

Rangarajan’s Committee on Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.Rangarajan’s Committee on Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost.” With a view to reach financial inclusion to the poor and rural mass in this country the government of India identified the financial inclusion is a strategy to achieve the inclusive growth provided and it is supported by various factors like real initiatives from Banks and Financial Institutions, technological development, financial literacy and so on. Amongst various measures to fight this menace, micro finance practices in India seem to provide a solution. The SHG – Bank Linkage programme had proved its efficiency as a main stream programme for Banking and emerged as one of the need based policies and programmes to cater the neglected groups of society such as woman, poor and deprived sections of rural areas. Several studies made by national and international experts on micro finance have found the SHG profitable, viable and as a successful tool or social empowerment and also no bank has reported any NPA under the SHG Bank linkage. The beautiful advantages of the programme are on time repayment of loans to banks, reduction in transaction cost to the poor and to the banks , door – step savings and credit facilities to the poor and exploitation of the untapped business potential in rural India. The programmed started as an outreach programme has in fact, achieved more than mere provision of thrift and credit facilities to the poor women. The government of India and State governments can play vital roles in encouraging SHGs. They should formulate and redefine their strategies and policies such a way to stress on extensive awareness campaign, skill development and training programmes, co – ordination between banks and SHGs, effective flow of credit need for strong follow – up in those states where it is yet at nascent stage. It is also necessary to develop a sound and transparent regulatory structure for micro finance institutions for healthy growth of the sector along with supportive refinance and legal. FINANCIAL INCLUSION FOR SELF HELP GROUPS The poverty in India is wide spread as well as deep rooted and continues to be one of the biggest policy concerns. Amongst various measures to fight this menace, Microfinance practices in India seem to provide a solution. The Task Force on supportive policy and regulatory Frame work for Microfinance constituted by NABARD defined microfinance as “the provision of thrift , saving, credit and financial services and products of very small amount to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improving their standard of living.” The Banking system in India witnessed unprecedented growth and achieved phenomenon out reach. Apart from the existing banking network, with a view to developing a supplementary credit delivery system i.e. cost effective and user friendly for both banks and the International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 @ IJTSRD | Available Online @ www.ijtsrd.com | Volume – 1 | Issue – 5 | July-Aug 2017 Page: 834 poor, micro finance initiatives were encouraged in India. These initiatives have been centered around two models i.e. the SHG – Bank linkage programme & the Micro Finance Institutions (MFI’s) model. Women, who number 495.7 million according to 2001 census, represent 48.3% and 933 females per thousand males. It reveals that the decline of women number in total population of the country. Moreover nearly 1.5% of women have their own property. About 11% women are in employment and mere 5% have been participating in business. The present paper is an attempt to study the Micro Finance through SHG’s. The Concept of Self Help Group’s (SHGs): Micro financing is a new method to meet the credit requirement in rural areas. Since the bank borrowing requires collateral and the deprived class does not have any type of such collaterals, the success of Bangladesh Grameena Banks attracted the attention of Indian Policy makers towards the Micro finance and micro credit, which are the new entrants in realm of present rural financing. The Self Help Group (SHG) bank linkage model has emerged as the most dominant model of Micro Finance delivery in India. A Self Help Group (SHG) is a registered or unregistered group of micro entrepreneur’s with homogeneous social and economic background, voluntarily coming together with an average size of about 15 individuals. They come together for addressing their common problems. They are encouraged to make voluntary thrift on a regular basis. They use this pooled resource to make small interest bearing loans to their members. The process helps them imbibe the essentials of financial intermediation including prioritization of needs, setting terms & conditions and account keeping. This gradually builds financial discipline in all of them. The Self Help Group (SHG) members begin to appreciate the fact that resources are limited and have a cost. Once the groups show this mature financial behavior, banks are encouraged to make loans to the Self Help Group (SHG) in certain multiples of the accumulated savings of the Self Help Group (SHG). The bank loans are given against group dynamics without any collateral and at market interest rates. Since the group’s own accumulated savings are part and parcel of the aggregate loans made by the groups to their members, peer pressure ensures timely repayments. Self Help Group’s (SHGs) – Bank Linkage Programme: The SHG – Bank linkage programme was started as an action research project in 1989. The pilot project was launched by NABARD in 1992 with policy support from Reserve Bank of India. The pilot project was designed as a partnership model b/w three agencies, via the SHG’s, Banks and Non Governmental Agencies (NGO’s). The SHG’s were expected to facilitate collective decision making by the poor and provide door step banking, the banks as wholesalers of credit, were to provide the resources, while the NGO’s were to act as agencies to organize the poor, build their capacities and facilitate the process of empowering them. Table: 1Overall Progress under Micro-Finance during the last three years (` in crore) Particulars 2012-13 2013-14 20014-15 No. of SHGs Amount No. of SHGs Amount No. of SHGs Amount A) SHGs Bank linkage Model Savings of SHGs with Bank as on 31 March Total SHGs 50097 94 3785.39 6121147 (22.2) 5545.62 (46.5) 6953250 (13.6) 6198.71 (11.8) Out of which SGSY 12030 70 809.51 1505581 (25.1) 1563.38 (93.1) 1693910 (12.5) 1292.62 (17.3) International Journal of Trend in Scientific Research and Development (IJTSRD) ISSN: 2456-6470 @ IJTSRD | Available Online @ www.ijtsrd.com | Volume – 1 | Issue – 5 | July-Aug 2017 Page: 835 Bank loans disburse d to SGHs during the year Total SHGs 12277 70 8849.26 1609586 (31.1) 12253.51 (38.5) 1586822 (1.4) 14453.30 (17.9) Out of which SGSY 24664 9 1857.74 264653 (7.3) 2015.22 (8.5) 267403 (1.0) 2198.00 (9.1) Bank loans outstand ing with SGHs as on 31 March Total SHGs 36259 41 16999.91 4224338 (16.5) 22679.84 (33.4) 4851356 (14.8) 28038.28 (23.6) Out of which SGSY 91697 8 4816.87 976887 (6.5) 5861.72 (21.7) 1245394 (27.5) 6251.08 (6.6) B) MFI Bank linkage Model 2012-13 2013-14 2014-15 No. of MFI Amount No. of MFI Amount No. of MFI Amount Bank loans disbursed to MFIs during the year 518 1970.15 581 (12.2) 3732.33 (89.4) 691 (18.9) 8062.74 (116.0) Bank loans outstanding with MFIs as on 31 March 1109 2748.84 1915 (72.7) 5009.09 (82.8) 691 (21.0) 8062.74 (102.6) Note: Actual number of MFIs provided with Bank loans would be less as several MFIs could have availed from more than one Bank. The performance of SHG – Bank Linkage Programme continued to be the predominant micro finance model in India. (During 2012– 13, 686,408 new SHGs were credit linked with banks, taking the cumulative number of SHGs credit linked to 2.92 million. In addition, 457,410 existing SHGs received repeat finance during the year. Table 2: Microfinance – Savings of SHGs with Banks Region-wise and Southern States as on 31 March 2014(Amount ` lakh) Sr. No. Region / State Commercial Banks Regional Rural Bank Cooperative Bank Total No. of SHGs Saving Amount No. of SHGs Saving Amount No. of SHGs Saving Amount No. of SHGs Saving Amount A Northern Region 185795 22641.01 85340 5505.92 80666 6060.38 351801 34207.31

started as an outreach programme has in fact, achieved more than mere provision of thrift and credit facilities to the poor women. The government of India and State governments can play vital roles in encouraging SHGs. They should formulate and redefine their strategies and policies such a way to stress on extensive awareness campaign, skill development and training programmes, coordination between banks and SHGs, effective flow of credit need for strong followup in those states where it is yet at nascent stage. It is also necessary to develop a sound and transparent regulatory structure for micro finance institutions for healthy growth of the sector along with supportive refinance and legal.

FINANCIAL INCLUSION FOR SELF HELP GROUPS
The poverty in India is wide spread as well as deep rooted and continues to be one of the biggest policy concerns. Amongst various measures to fight this menace, Microfinance practices in India seem to provide a solution. The Task Force on supportive policy and regulatory Frame work for Microfinance constituted by NABARD defined microfinance as "the provision of thrift , saving, credit and financial services and products of very small amount to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improving their standard of living." The Banking system in India witnessed unprecedented growth and achieved phenomenon out reach. Apart from the existing banking network, with a view to developing a supplementary credit delivery system i.e. cost effective and user friendly for both banks and the They are encouraged to make voluntary thrift on a regular basis. They use this pooled resource to make small interest bearing loans to their members. The process helps them imbibe the essentials of financial intermediation including prioritization of needs, setting terms & conditions and account keeping. This gradually builds financial discipline in all of them. The Self Help Group (SHG) members begin to appreciate the fact that resources are limited and have a cost. Once the groups show this mature financial behavior, banks are encouraged to make loans to the Self Help Group (SHG) in certain multiples of the accumulated savings of the Self Help Group (SHG). The bank loans are given against group dynamics without any collateral and at market interest rates.
Since the group's own accumulated savings are part and parcel of the aggregate loans made by the groups to their members, peer pressure ensures timely repayments.

Self Help Group's (SHGs) -Bank Linkage Programme:
The SHG -Bank linkage programme was started as an action research project in 1989. The pilot project was launched by NABARD in 1992 with policy support from Reserve Bank of India. The pilot project was designed as a partnership model b/w three agencies, via the SHG's, Banks and Non Governmental Agencies (NGO's). The SHG's were expected to facilitate collective decision making by the poor and provide door step banking, the banks as wholesalers of credit, were to provide the resources, while the NGO's were to act as agencies to organize the poor, build their capacities and facilitate the process of empowering them.  NABARD intensified the implementation of the programme in the 13 identified priority states. Some of which account for the back or the rural poor viz UP, Orissa, WB, MP, Maharashtra, Gujarat, Rajasthan, Chhattisgarh, Jharkhand, Bihar, Assam, Himachal Pradesh and Uttarkhand. According to the programme spread rapidly in these states indicates a marked shift from its initial localization in the Southern region. In terms of relative shares of different agencies Commercial banks continue to maintain their lead both in terms of number s or SHGs credit linked and loan disbursed through RRB and take the second position of the banks. Region wise including southern states progress under Micro financesavings of SHGs shown in the

Coverage of Women SHGs
The details of total number of women SHGs saving linked, credit linked and loans outstanding for the last two years are given in table 6

CONCLUSION
The Task Force on supportive policy and regulatory Frame work for Microfinance constituted by NABARD defined microfinance as "the provision of thrift , saving, credit and financial services and products of very small amount to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improving their standard of living." Since the SHGs were able to mobilize savings from the poor who were not expected to have any savings and could also recycle effectively the pooled saving among the members, they succeeded in performing banking services to their members may be in a primitive way but in a manner which was cost effective, simple, flexible at the door steps of the members and above all without defaults in repayment by borrowings which is well managed by the poor illiterate women. Women, who number 495.7 million according to 2001 census, represent 48.3% and 933 females per thousand males. It reveals that the decline of women number in total population of the country. Moreover nearly 1.5% of women have their own property. About 11% women are in employment and mere 5% have been participating in business. The present paper is an attempt to study the Empowerment of women through SHG's in Andhra Pradesh.